Finance Ministry Displeased at Poor Profit Numbers of State-Run Banks
Mumbai: The Finance Ministry has made public its displeasure over the dip in the bottomlines of most of the state-run lenders, including State Bank of India, in the March quarter earnings.
"It is akin to asking someone who got bashed up on the road how he feels about it," Financial Services Secretary Rajiv Takru said on the sidelines of an event here over the weekend when asked for his response to the drop in net profit of many public sector banks in the March quarter.
"I am not in love with it, no!" he added. Driven by a higher provisioning, SBI's net for the March quarter plunged 18.5 per cent at 
3,299.22 crore against 4,050.27 crore in year-ago period.
This was the first time in the last two years that the bank had shown a decline in the quarterly net profit.
SBIBSE -1.15 percent, which was among the last banks to come out with its numbers, joined a slew of its peers from the state-run lenders space in declaring lower numbers.
Among other banks, net profit of Kolkata-headquartered Allahabad BankBSE 1.11 percent plummeted to 126.15 crore against 400.22 crore in the corresponding period a year ago.
Others in the league are United Bank of IndiaBSE -0.89 percent (31.18 crore in March 2013 against 149.29 crore year ago), Indian Overseas BankBSE -0.25 percent (58.86 crore versus 528.81 crore), Bank of India (756.57 crore versus 952.73 crore) and Bank of BarodaBSE 0.45 percent (1,028.85 crore against 1,518 crore).
However, Union Bank of IndiaBSE 0.42 percent and Corporation BankBSE 0.54 percent managed to show a marginal rise in profits during the period.
Takru also reiterated his demand for hiking the penalty for errant banks found flouting rules from the current 1 crore.
"1 crore is insignificant in current context. It has been discussed with the RBI. It requires a change in the rules. As soon as that limit is increased, one can look at heavier fines," he said.
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